Summaries of health policy coverage from major news organizations

California Controller Prepares Plan To Delay Some State Payments

On Friday, California Controller John Chiang (D) announced that the state will make payments to health care providers that participate in Medi-Cal next month but will delay $3.7 billion in payments to mental health and other social services programs, the San Jose Mercury News reports.

Chiang said he would delay payments for 30 days in hopes of avoiding having to issue IOUs in February or March (Yi, San Francisco Chronicle, 1/17).

Chiang said a decrease in revenue from sales, property and capital gains taxes has left the state short of funds. Moreover, Chiang said the state cannot borrow from special funds and Wall Street investors, as it has relied on in the past (Lin, AP/San Francisco Chronicle, 1/16).

The state budget deficit is projected to hit $42 billion by mid-2010.

Possible Consequences

The controller is anticipating that the state will incur more than $16 million in interest by delaying some payments for 30 days, including grants to the poor, aged, disabled and college students (San Francisco Chronicle, 1/17).

Chiang said he would have to proceed with the plan unless Gov. Arnold Schwarzenegger (R) and the legislature reach a budget agreement in the next few days (San Jose Mercury News, 1/16).

Paul McIntosh, executive director of the California State Association of Counties, said the delays would push some counties to eliminate mental health and substance abuse treatment programs because counties already have tapped into financial reserves (AP/San Francisco Chronicle, 1/16).
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